How is the IRA out-of-pocket cap reshaping Part D benefit design?

Q: How is the IRA out-of-pocket cap reshaping Part D benefit design?

The IRA out-of-pocket cap is $2,100 for CY2026 and the standard deductible is frozen at $590; carriers are competing by waiving Tier 1/2 deductibles. With catastrophic exposure capped, the competitive front moved to the first dollar: whether a plan waives the deductible on Tier 1/2 generics is now a visible shopping differentiator, while plans absorb the catastrophic-phase liability the cap shifted onto them.

Data through CY2026 final parameters · Updated April 7, 2026 static extract

The IRA annual out-of-pocket cap is $2,100 for CY2026, and the standard deductible is held at $590 — ending two decades of unbounded catastrophic exposure. Carriers now compete on first-dollar design: 7 of 8 tracked carriers waive the deductible on Tier 1 drugs.

$2,100

OOP cap, CY2026

CMS final parameters

$590

Standard deductible (capped by IRA)

CY2026

7/8

Tracked carriers waiving Tier 1 deductible

CY2026 filings

Standard deductible by contract year

Values in USD. The IRA caps deductible growth from CY2025.

Carrier Tier 1/2 deductible-waiver strategies, CY2026

Carrier	Waives Tier 1	Waives Tier 2	Strategy note
Kaiser	✓ Yes	✓ Yes	Full Tier 1/2 waiver — uses PBM leverage to absorb cost
BCBS	✓ Yes	— No	Tier 1 only waiver — standard preferred approach
Elevance	✓ Yes	— No	Tier 1 waiver with Wellpoint specialty carve-out
Aetna	✓ Yes	✓ Yes	CVS pharmacy integration eliminates Tier 2 burden
UHC	✓ Yes	— No	Tier 1 only; Optum PBM manages cost recovery on Tier 2
Humana	✓ Yes	— No	Tier 1 only — limited by MLR pressure
Centene	— No	— No	Standard deductible on all tiers except $0 insulin
Cigna	✓ Yes	— No	Tier 1 waiver via HCSC formulary alignment

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Citation: MedicareInsights. “How is the IRA out-of-pocket cap reshaping Part D benefit design?.” CMS Part D benefit parameter announcements; IRA statutory provisions, data through CY2026 final parameters. https://medicareinsights.org/spend/part-d-oop-cap/.

So what / Now what

With catastrophic exposure capped, the competitive front moved to the first dollar: whether a plan waives the deductible on Tier 1/2 generics is now a visible shopping differentiator, while plans absorb the catastrophic-phase liability the cap shifted onto them.

Plan design: if competitors in your counties waive Tier 1/2 deductibles and you don't, expect it to show in AEP switching — check the waiver table below.
Actuarial: the cap shifts high-cost-member liability to plans; re-model catastrophic-phase exposure with 2026 utilization, not pre-IRA patterns.
Pharma market access: capped OOP removes the abandonment cliff for high-cost brands — refill persistence assumptions need updating.

Provenance — Part D benefit parameters, CY2022–CY2026

Source file: CMS Part D benefit parameter announcements; IRA statutory provisions
Vintage: CY2026 final parameters
Last updated: April 7, 2026
Refresh cadence: Annual (April announcement)
Method: Published standard deductible and IRA out-of-pocket cap by contract year; carrier deductible-waiver strategies compiled from public formulary filings.
Known limitations: Waiver-strategy rows are compiled from public filings and may lag mid-year formulary changes.